The antidiabetic drug phenformin displays potent anticancer activity in different tumors, but its mechanism of action remains elusive. Using Shh medulloblastoma as model, we show here that at clinically relevant concentrations, phenformin elicits a significant therapeutic effect through a redox-dependent but complex I-independent mechanism. Phenformin inhibits mitochondrial glycerophosphate dehydrogenase (mGPD), a component of the glycerophosphate shuttle, and causes elevations of intracellular NADH content. Inhibition of mGPD mimics phenformin action and promotes an association between corepressor CtBP2 and Gli1, thereby inhibiting Hh transcriptional output and tumor growth. Because ablation of CtBP2 abrogates the therapeutic effect of phenformin in mice, these data illustrate a biguanide-mediated redox/corepressor interplay, which may represent a relevant target for tumor therapy.